A
damned interesting event occurred recently that has nearly slipped
under the radar. "Damned interesting" may seem hyperbole to most of you
but to those who gravitate toward the historical, political and
regulatorial (that's not really a word), this event is pretty
interesting.

Written
in 1933 and underwritten by John D. Rockefeller, the book was offered
as a guide for state policymakers on how create a regulatory system for
newly legalized alcohol after Prohibition was fully repealed. Daniel
Okrent, author of the best-selling “Last Call: The Rise and Fall of
Prohibition" said of Toward Liquor Control: “As Prohibition was coming
to an end, Toward Liquor Control was one of the key documents
influencing how the nation would deal with alcoholic beverages going
forward.”

The
folks that wrote this book were fairly laser-focused on solving some
very specific problems as they devised their recommended state
regulatory schemes for a 1930s, post-Prohibition world:

Prevent
society (by law) from endorsing or cultivating the culture of the
Saloon and Speakeasy that led to so many alcohol related problems prior
to and during Prohibition;

Assure
that producers of alcohol (specifically brewers) could no longer tie
bars, restaurants or retailers to them through coercion that in turn
would lead to irresponsible marketing;

Promote Temperance

Promote Respect for the Law.

Put
another way, "Toward Liquor Control" is a fascinating document that
gives us a window into the minds of men who believed alcohol consumption
was generally a bad thing and who had been significantly influenced by
witnessing the alcohol market in the first third of the 20th Century.
Or, put another way: “Toward Liquor Control” has absolutely no relevance
in today's world.

But
I don't think this is the point that the National Beer Wholesalers
Association wanted to make in doing us the favor (and I mean that) of
re-releasing the book. The blurbs they published with the book include
the same Daniel Okrent saying, “It’s as relevant today as it was then.”

Another
blurb about the book from James Sgueo, President and CEO, National
Alcohol Beverage Control Administration (an association of regulators
from "Control States") said this: "Toward Liquor Control is a study just
as important today as when it was written in 1933. With the failed
federal experience of Prohibition, Fosdick and Scott [the authors]
recognized the benefits of the states having the ability to enact
alcohol policies most suitable for their respective jurisdictions and
demographics.”

Ridiculous. Saying
that a book on how to re-regulate alcohol after years of Prohibition
written almost 80 years is relevant to an age when there is no longer
any memory of Prohibition, new attitudes toward alcohol that never
existed in 1933 and a commercial market for the product that could not
even be imagined in 1933 is like saying Ptolemaic Astronomical theory is
as relevant today as it was 1000 years ago.

What
we have here in the release of “Toward Liquor Control” by the beer
wholesalers is a continuation of their desire to assure slavish fidelity
to a system of alcohol control that benefits wholesalers but is also a
system that is so archaic that it can't be justified today on commercial
or social grounds.

But,
I am really pleased that the beer wholesalers sponsored the
republishing of this book. It really is a fascinating historical read.
The authors had a very specific view of what alcohol regulation ought to
accomplish. Their preferred way to achieve their goals was to cut out
the profit motive altogether and see a state control system set up where
it was the state that sold and distributed all liquor.

However,
they knew that many states would not take this route and take out the
profit motive that they believed would lead to problems.

What's
really amazing is just how accurate the authors of “Toward Liquor
Control” were in predicting the results of instituting a Licensed Based
System of alcohol control that allowed for profit. They realized it
would be corrupted by profit-motivated interests who would work to game
the system toward their interests.

They
wrote: “For the establishment of a licensed-liquor trade means the deep
entrenchment of a far-flung proprietary interest. This interest would
have a large capital investment to be protected at all costs. Buildings,
leases, fixtures, inventories, stocks and bonds—representing millions
of dollars—would require defense against those who in the public
interest might threaten curb or reduction...

“Moreover,
such a vested interest is bound to employ aggressive tactics in its own
defense. Liquor trade associations, open and disguised, would
continuously oppose every restriction of opportunities to sell....

“As
proposals to dismember any part of the liquor selling business becomes
more threatening, the entire trade combines more solidly to protect
itself. In brief, a licensed liquor trade, once established, cannot be
easily dislodged."

Color
me cynical, but this sounds like a pretty close description of what has
become of the Wholesale tier of the alcohol industry. Wholesalers have
made significant investments in a system that benefits them and they do
defend that system against "curb or reduction" and any reform. They have
organized behind "liquor trade associations to oppose "restrictions" on
their opportunities to sell under the current system that benefits
them. And the entire wholesale trade has "combined more solidly to
protect themselves" and they are most definitely not "easily dislodged"
from their current dominant position that allows them to control so many
aspects of the alcohol beverage trade.

The
authors of “Toward Liquor Control” did not advocate a state-mandated
use of the wholesaler that now exists in nearly every state that
regulates alcohol by issuing licenses to producers, wholesalers and
retailers. So, they could never predict it would be wholesalers that
took over the position that brewers held prior to Prohibition as the
corruptors of the system that lawmakers later knew needed controls after
Repeal was passed.

The
point is that the 1933 authors of “Toward Liquor Control” were devising
a system of alcohol regulation for 1933 and they could not begin to
devise a system that would be effective in 2011. And yet, few if any
fundamental reforms have occurred despite the Wholesalers frequent but
sublimely absurd claim that the system is threatened by deregulation.

I highly recommend reading “Toward Liquor Control” to anyone who enjoys the exploration of history.